Morgan Stanley praises Apple Inc. (AAPL.US): Partnering with Alibaba to upgrade AI functions for the Chinese iPhone will be a key catalyst.

According to reports, Apple Inc. (AAPL.US) is partnering with the Chinese e-commerce giant Alibaba Group Holding Limited Sponsored ADR (BABA.US) to develop Apple Inc. Intelligence features for the iPhone in the Chinese market. Analysts say this could be a catalyst for iPhone growth. According to foreign media citing The Information's report, the two companies have jointly developed artificial intelligence features and submitted them to Chinese internet regulators. Apple Inc. and Alibaba Group Holding Limited Sponsored ADR did not immediately respond to requests for comment. If successful, this collaboration will bring significant momentum to iPhone upgrades, as Apple Inc.'s sales in China have been struggling. CEO Tim Cook stated that Apple Inc. witnessed record iPhone upgrades in the first quarter, with strong sales in markets with Apple Intelligence. However, the artificial intelligence features have been unavailable in China since their release in October of last year, causing a setback for Apple Inc. during crucial holiday sales seasons. The Greater China region was the only area where Apple Inc. saw a year-on-year decline in sales in the first quarter, with iPhone sales in China also falling below analysts' expectations. On Monday, Morgan Stanley analysts told clients that the collaboration with Alibaba Group Holding Limited Sponsored ADR will be a "key catalyst for Apple Inc.'s competitive position in China" and may help address the decline in iPhone sales in the country. JPMorgan also stated that this move supports the "bullish expectations" for Apple Inc. to launch the iPhone 17 before the fall of this year. Apple Inc.'s stock price rose by over 2% on Tuesday, while Alibaba Group Holding Limited Sponsored ADR's stock rose by 1%.